Market Bloodbath, "Happy Birthday Mr. President" Edition

The Dow is down more than 500. The S&P is down 60. The VIX surges 35% to 32 the highest since June 2010. Implied correlation surges to the highest since last summer. ES volume surges to the highest since the flash crash. Europe is opening in 12 hours. Margin debt is near record high levels, and mutual funds have record low cash. Liquidations galore. Did we miss anything?

Cramer is amusing, and if you ignore the stockpicking you can even learn something once in a while, but above all others his best feature is as a market bottom indicator. He is so bullish he preaches buy the dip all the way down, but when he throws in the towel and starts talking like it's the end of the world then you know it's time to buy equities big time because the bottom is in. If you had done that during the last crash you could have ridden a 7000 point gain on the way up.

Seriously....what a crock of sh&t....and now we're up a river of it without a paddle. Popular faith in money and Mammon is about to come to a catastrophic End. You can thank human AUTHORities for failing to heed God...

You all can buy TFD with your own money. I say if ever there was a time to pile all in on PM's (or even toilet paper, coffee, smokes) this is it. This is what we have been waiting for boys and girls. Everything, and I do mean everything sold off today except long bonds, and the fact that all action went into them is sign of sheer desperation on the part of those with anything left to move. Even that will prove temporary.

We all know the Fed and Treasury will do anything at this point to staunch the hemorrhaging, they will out and out plow US dollars into the stock market in spite of the obvious illegality of that move, but euro is toast, everyone knows it, The BOJ went all in today to deflate the yen and it was for nothing, there was a global attack on the falling dollar, the world spent trillions today to keep the dollar strong and they lost. The yen was particularly poignant, they went from 76 point whatever to almost 80 in a day, and back up to 78.6 as I write. The euro is not even worth mentioning as few in the financial sphere even see it as actual money anymore. The powers that be in Europe are still trying to rescue a currency that is not even currency. Yes, they can weaken the exchange rate by issuing tons of it, but nobody really cares at this point and the 26 eurozone nations are feeling the destruction, except Germany which the euro is designed to make so much richer, 25 other nations suffering to support German mercantilism. Now the world is calling bullshit on the euro, and they are equally unconvinced of the BOJ action.

Get ready for real inflation/deflation kiddies, like you have never seen. Every central bank is going to issue so much "money" that they will spam your inbox trying to get you to take more of it. We are in the collapse we have waited for.

(edit) my bad, not all 26 EU member states are in the eurozone, GB for example, I got carried away with the depth of what happened today. But, it really was a watershed, the ECB had said just last night that the euro would be supported no matter what went on politically, yet by the end of the day they had done nothing because they have no legal ability to anything. It is so bad that Italy has withdrawn from bond auctions for at least the next month, if the ECB were willing and able to support Italy then Italy would sail through their bond selling just as the US sails through it's auctions thanks to the Fed. But they cancelled their borrowing saying they had more cash than they thought they did. Does this alone not raise red flags with all investors? How can Italy not know how much cash it has, or what access to debt markets it needs?

Look for tomorrow to be an up to neutral day on equity markets, neutral on bonds, up on commodities, in the EU and US anyway. The central banks are shitting themselves as I type and they will not allow a total meltdown. They will simply plow trillions into all markets to make for a neutralish day. If they do it early look for all indicies to be well higher as the markets will see that central banks will support them no matter what. This is the first real day of monetization on a grand scale.

You make some good points....but we're not yet at Ponzi Collapse. QE 3 will puff up US stocks for a few more months, plus flight from Euro into US TBs, tho there will be some "bad" days before it all gets done. Monday, 8/8 should be a fast down elevator...but the cable won't break. Yet. I hope...

According to NIA "This stock market correction will not turn into a crash like in late-2008/early-2009. Back then we had a liquidity crisis, but with interest rates today near zero and having been there for over two years, the world is now flooded with excess liquidity of U.S. dollars. Stocks became overvalued in recent months with the Dow Jones/Gold ratio reaching a high on May 5th of 8.36 and were overdue for a large correction. If the stock market continues to fall, we will soon hear from the Federal Reserve who will either unleash QE3 in disguise or act to push the $1.6 trillion in excess reserves of banks into the economy. By the end of 2011, we expect gold and silver stocks to decouple from the rest of the market and for many of them to reach new highs."

not as good as yours truly of course. which of course is why you come here! having said that his gold call is "most expert" and should be commended. the silver surfer has struck and now "civilizations must die." again: "all eyes on the credit and by extension debt markets." and of course you haven't heard the last from oil.

“To look like a deer in the headlights” is an American expression meaning “to look stunned and at a loss for words when asked an unexpected question or made the center of attention” (“When I ask the tellers about Y2K, I get … deer-in-the-headlights stares…,’” Chicago Sun-Times, 1999). The phrase refers to the behavior of deer caught in the beams of car headlights at night, when they frequently simply freeze for several seconds rather than running safely out of the car’s path. Living in rural Ohio, I can attest to the alarming stupidity of deer in such situations. On the other hand, deer can’t hold a candle to possums, who apparently believe they’re immortal and run right at your car.

OK, apologies to Fidel and, yes, I'm just hitting your post to get close to ThreadTop to cut thru all the "witty" comments and ask two important questions:

1. Did anyone else notice the decline was not so much of a crash ... waterfall-type decline, but more of a "dance" downwards? With apologies to the erstwhile Chuck Prince, this all looked pretty much under control and more like a prelude to QE3 to me. They're still dancing. So ...

2. What the fuck do we do tomorrow?! I've been layering on shorts for months now, and so made some serious dough today ... well, really just recovered a lot of my losses, but I have to feel that once stox have declined sufficiently to pull the Humpty Dollar back from the edge a bit, and enough to justify the (inevitable) QE3, a monstrous equity rally will ensue. So the question is: is there more decline in store, or should shorts be covered ASAP?

I'm inclined to give it a few more days myself and ride out any snap-back rally ... 'til Jackson Hole, perhaps?

Stocks are down, PMs are down, USD and EUR are down, oil is down.... where did the money go? Is this debt deflation? Get your QE ready folks.... I'll leave the speculation about how this all came to pass to the more imaginative theoretical commenters ;)

USDX is not down- it's up fairly sharply for the day. That's not to say that it's situation has improved, just that people pulled out and converted to USD for now. Getting liquid as a safety net until they decide where to put it- my vote is for Au and Ag to take off, but you never know what this idiotic situation is going to do next.

I can see Barry sitting in that big chair with his birthday hat on sideways just staring agape at his bbg monitor (OK, Google Finance) and saying, "Bbbbut, bbut, but, we didn't default!? I don't get it!?"

and as such would probably spook the market even more. why buy treasuries when that's all that's being bought? at least you can finally put to rest the theory that it's been the Fed pumping the equity markets all along and all the rest of (Brian)"Sack of Shit" stuff.

an unimpassioned observer might argue that S&P 999 is actually a perfect number to even start the conversation of more monetary stimulus. exactly 50% up from the 666 low, and roughly 33% off the high. a nice stalemate, plus the Masons will love it.

Very funny. You should put HTML sarcasm tags around that comment cause some might not get it.

I've been saying for weeks here on ZH that this was coming, along with many others. it was all too obvious. Only unlike some of the ultra-neo nazis that have come to call ZH home, I did not blame it on "the jewish bankers" or the NWO. I based it purely on technicals, i.e., charts, and nothing else. I must have said it at least half a dozen times. I finally shut up because I felt I was either precahing to the choir, or to people with their heads up their ass.

Are there not people behind every chart? Without the behavior of people, your charts would show nothing. You are interested in the charts. Others are interested in the behavior that makes the charts move.

knuckles - was that question directed to me? If yes, iNull said s/he bases things on technicals, not on people. I was responding that it is people's behaviors that lead to the stuff reflected in the technicals. If iNull was trying to say that technicals are more important than people, I was pointing out that technicals are a reflection of what people have done. Predict the people and you can predict the technicals. But only if you want to.

I think it's very interesting that the long bond contract offered an early warning for this crash; money was already flowing into the Bond, traditional refuge of "big, serious" money, before things got serious. This was not the case in the 1987 "Black Monday" crash. Quite a few heavy hitters knew this was coming.

just got a return call on the foodstamp thing...funny thing is, they were as shocked as anyone -- didn't believe me at first. it seems to be a case of something called 'double counting'. people already on are getting emergency boosts and then there's the massive one-timers...so, while it's not truly anomolous, it's, as they say round here (ZHere), transitory...fer now.

yeah refjuckindiculous, talked about a skewed outcome to this mess. Savers, you now are additionally penalized, we thought that low return and declined purchasing power was not bad enough for your selfish actions. You now must pay us for the honor of "managing" your money.

actually the short rates suddenly spiking preceded this sell off--as they always do. so much for the "we're the government and we have free money" theory. AGAIN. Prepare to see more of that...actually. And of course the dollar soared against the yen--and could very easily surge against the euro in here. THAT actually does sound deflationary. Which of course is what Ben Bernanke was trying to create all along...right? Or is just "bankruptionary"?

So now people are going to be chased into bonds, which the treasury just so happens has to sell a metric ass-ton of. The proceeds will be used to again to buy equities on the cheap then pump the market to get sheep back into the market.

nice try but it doesn't work that way. the fact of the matter is bonds SELLING OFF are a buy signal for equities (upward sloping yield curve.) now you're being "flattened." PERFECT for gold and silver. Oil COULD hiccup...IF the dollar suddenly finds a testicle in here. Who knows? Even i've gotten lucky from time to time.